In a March 21 opinion piece to Business Alabama, Brad Bolton, CEO of Community Spirit Bank and chair of the Independent Community Bankers of America, misrepresented some facts related to credit unions acquiring banks.
When a credit union purchases a bank, customers benefit from gaining access to community-focused financial services, local economies maintain in-state assets and communities receive more than $4 billion in indirect consumer benefits, especially in underserved areas. In addition, offices remain open and staff retain jobs.
Since 2004, credit unions have opened a net of 1,600+ branches, proving the commitment of credit unions to reaching underserved communities and offering services, often with better deposit and loan rates and lower fees. As 80% of bank-credit-union transactions have involved low-income designated credit unions, America’s credit unions are working to ensure that no consumer is left behind.
The assertion that credit unions do not pay taxes is also in error. Credit unions pay every tax a bank pays, with the exception of federal income taxes. We pay property taxes, excise taxes, social security and unemployment taxes, etc. – in other words, the taxes that go toward local governmental entities, schools and more. Credit unions are exempt only from federal income tax since we are not for-profit organizations and are owned by our members, not stockholders. It should be noted that many small, community banks, including the bank recently acquired by Alabama Credit Union, qualify as Subchapter S entities, and therefore do not pay taxes at the corporate level, either. Credit unions paid nearly $25 billion in local, state, and federal taxes last year.
Credit unions continue investing in the local communities they serve, growing the economy by expanding small business loans and empowering job growth. In 2019, Alabama credit unions issued a total of $886 million in small business loans, and in 2020 alone, Alabama credit unions returned more than $268 million in benefits to members and communities, further proving that credit unions are helping members achieve the American Dream.
The 130 million credit union members nationwide are a testament to just how popular credit unions are among consumers and the purchase of small banks can actually allow local communities the opportunity to enjoy benefits previously unavailable to them.
Steve Swofford is the CEO of Alabama Credit Union, which recently acquired a bank. Brad Green is the CEO is Listerhill Credit Union and immediate past-chair of the Credit Union National Association.